It’s now clear that 2022 is not the year of cryptocurrency. NFTs have cratered in value, crypto companies continue to struggle and even a proposed merger of two major companies in an effort to keep one solvent might be evaporating as you read this. It’s kind of wild to think how quickly things have changed. It was just February when the world was awash in crypto ads, flooding the Super Bowl and billboards and basically anywhere startups could advertise that they could sell you Ethereum. Even NFTs were still a thing people talked about in mixed company.
It seems we’re a world away from that now, though. As of Tuesday, crypto trader FTX was on the brink of collapse with a competitor, Binance, on the verge of acquiring it just to keep it afloat. As the New York Times reported on Wednesday, the deal was a last-ditch effort to keep thousands of crypto investors from losing it all.
As news spread of FTX’s collapse, crypto markets took a battering, with Bitcoin and Ether both dropping more than 15 percent since Tuesday.
On Tuesday, Mr. Bankman-Fried framed the Binance takeover as a measure to ensure that FTX customers did not lose their money. But the deal is not finalized and its exact terms remain unsettled, leaving open the possibility that FTX’s hundreds of thousands of customers could lose their funds and set off another crash in crypto prices.
That deal, though, might not actually go through. As Coindesk reported later Wednesday, Binance started “strongly” considering backing out of the deal once their executives actually got a look inside FTX’s finances. Which is to say, well, they might actually be worse than first thought.
Binance’s nonbinding letter of intent for the takeover – announced Tuesday as FTX’s financial position appeared to be spiraling out of control – hinged on Binance performing due diligence. Roughly half a day into that process of reviewing FTX’s internal data and loan commitments has led Binance to strongly lean against completing the transaction, the person said.
So what does this mean? Well, if you’re investing in crypto right now, your portfolio may be at risk. News of the merger falling apart caused prices of crypto to dip further on Wednesday, and an actual liquidation of FTX would be a disaster for thousands of investors, including founder Sam Bankman-Fried. And that’s true of some major figures who invested heavily in the market and even promoted crypto back in the salad days of [checks calendar] several months ago. Like, well, Tom Brady. As Gizmodo points out, Brady had apparently invested big in crypto as part of his post-retirement plans.
Back in 2021 Tom Brady and his then wife, Brazilian model Gisele Bündchen, reportedly planted a large stake into the FTX crypto exchange, after having already announced a partnership with FTX and its CEO Sam Bankman-Fried back in 2020. As brand ambassadors, the two gained an unknown equity stake in the company in exchange for crypto, likely FTX’s native coin FTT.
Brady, that means, could be taking a bath on his investment right now, unless he offloaded his assets before things got dicey in the last few weeks. But another big name might actually have made out better than anyone else: Larry David. David, of course, got the proverbial bag in actually starring in the commercial. And the longform message of the commercial is to not “be like Larry David.” But on Wednesday, with news of a Binance/FTX merger on the ropes, plenty of folks on social media were sharing just a small clip from that very expensive commercial from just eight months earlier. Namely, the part where the Curb star was very skeptical.
Larry David predicted FTX’s demise in a commercial for FTX pic.twitter.com/ZoQavJG3z1
— yzy.eth (@LilMoonLambo) November 9, 2022
While Brady definitely had some crypto from his brand ambassadorship with FTX, it doesn’t seem like David was actually saddled with the volatile currency. In a Hollywood Reporter interview with longtime David creative collaborator Jeff Schaffer after the ad debuted in February, payment methods actually came up. And though they apparently asked, everyone involved in that spot got cold hard cash for their efforts.
“We did ask about getting paid in crypto, but I don’t think they were set up for it for us, which was fine,” Schaffer said. “But we definitely did ask.”
In hindsight, it’s a very good thing that they got USD instead of whatever it is FTX may have paid them in. Otherwise, David might have been making a few frantic phone calls this week trying to get out from under what’s starting to look like a very unstable market.